Environmental taxation very often comprises special provisions for parts of the business sector in order to attenuate effects on competitiveness of emissionintensive activities. This paper discusses motives, alternative designs and criteria for the evaluation of such safeguards and analyzes if such provisions can reconcile environmental and economicobjectives. It looks at theoretical aspects as well ...
Environmental policies frequently target the ratio of dirty to green output within the same industry. To achieve such targets the green sector may be subsidised or the dirty sector be taxed. This paper shows that in a monopolistic competition setting the two policy instruments have different welfare effects. For a strong green policy (a severe reduction of the dirty sector) a tax is the dominant instrument. ...
We test the hypothesis that rising prices of emission allowances have a stronger impact on wholesale electricity prices than falling prices (asymmetric cost pass-through). Using an autoregressive distributed lag model, we confirm this hypothesis for the German market
In Germany, emission allowances (European Union Allowances, EUAs) for the first trading period (2005-2007) were allocated completely free of charge. In the second trading period (2008-2012) annual volumes of 40 million EUAs will be sold (Article 19 ZuG (Zuteilungsgesetz – The German Allocation Act) 2012). After an initial phase during which EUAs have been sold by the state-owned bank KfW Bankengruppe ...
We present a model with firms selling (homogeneous) products in two imperfectly segmented markets (a "high-demand" and a "low-demand" market). Buyers are mobile but restricted by transportation costs, so that imperfect arbitrage occurs when prices differ in both markets. We show that equilibria are distorted away from Cournot outcomes to prevent consumer arbitrage. Furthermore, a merger can lead to ...